ETE
$17.70
Energy Transfer Equity LP
($.06)
(.34%)
Earnings Details
2nd Quarter June 2017
Tuesday, August 8, 2017 5:00:01 PM
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Summary

Energy Transfer Equity LP (ETE) Recent Earnings

Energy Transfer Equity LP (ETE) reported 2nd Quarter June 2017 earnings of $0.18 per share on revenue of $8.9 billion. The consensus earnings estimate was $0.25 per share on revenue of $10.9 billion. Revenue fell 4.4% compared to the same quarter a year ago.

Energy Transfer Equity LP is a limited partnership company. The Company through its subsidiaries, owns and operates, natural gas gathering systems, natural gas intrastate pipeline systems and gas processing plants.

Results
Reported Earnings
$0.18
Earnings Whisper
-
Consensus Estimate
$0.25
Reported Revenue
$8.94 Bil
Revenue Estimate
$10.86 Bil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Energy Transfer Equity Reports Second Quarter Results

Energy Transfer Equity, L.P. (ETE) ("ETE" or the "Partnership") today reported financial results for the quarter ended June 30, 2017.

ETE’s net income attributable to partners was $212 million for the three months ended June 30, 2017 compared to $241 million for the three months ended June 30, 2016. Distributable Cash Flow, as adjusted, for the three months ended June 30, 2017 was $240 million compared to $276 million for the three months ended June 30, 2016. The decreases in net income attributable to partners and Distributable Cash Flow, as adjusted, were primarily driven by a reduction in incentive distributions as previously agreed to between ETE and ETP, as well as the impact of the ETP and Sunoco Logistics Partners L.P. ("Sunoco Logistics") merger in April 2017, as discussed below.

The Partnership’s recent key accomplishments and other developments include the following:

In July 2017, ETE announced a $0.285 distribution per ETE common unit for the quarter ended June 30, 2017, or $1.14 per unit on an annualized basis.

As of June 30, 2017, ETE’s $1.5 billion revolving credit facility had $1.20 billion of outstanding borrowings and its leverage ratio, as defined by the credit agreement, was 3.81x.

The Partnership has scheduled a conference call for 8:00 a.m. Central Time, Wednesday, August 9, 2017 to discuss its second quarter 2017 results. The conference call will be broadcast live via an internet webcast, which can be accessed through www.energytransfer.com and will also be available for replay on the Partnership’s website for a limited time.

The Partnership’s principal sources of cash flow are derived from distributions related to its direct and indirect investments in the limited and general partner interests in Energy Transfer Partners, L.P. ("Post-Merger ETP"), including 100% of ETP’s incentive distribution rights, limited and general partner interests in Sunoco LP, as well as the Partnership’s ownership of Lake Charles LNG. In connection with the merger of Energy Transfer Partners, L.P. ("Legacy ETP") and Sunoco Logistics in April 2017, the Legacy ETP Class H units were cancelled, and ETE now owns 27.5 million Post-Merger ETP Common Units (representing 2.5% of the total outstanding Post-Merger ETP common units). The Partnership’s primary cash requirements are for general and administrative expenses, debt service requirements and distributions to its partners.

Energy Transfer Equity, L.P. (ETE) is a master limited partnership that owns the general partner and 100% of the incentive distribution rights (IDRs) of Energy Transfer Partners, L.P. (ETP) and Sunoco LP (SUN). ETE also owns Lake Charles LNG Company. On a consolidated basis, ETE’s family of companies owns and operates a diverse portfolio of natural gas, natural gas liquids, crude oil and refined products assets, as well as retail and wholesale motor fuel operations and LNG terminalling. For more information, visit the Energy Transfer Equity, L.P. website at www.energytransfer.com.

Energy Transfer Partners, L.P. (ETP) is a master limited partnership that owns and operates one of the largest and most diversified portfolios of energy assets in the United States. Strategically positioned in all of the major U.S. production basins, ETP owns and operates a geographically diverse portfolio of complementary natural gas midstream, intrastate and interstate transportation and storage assets; crude oil, natural gas liquids (NGL) and refined product transportation and terminalling assets; NGL fractionation; and various commodity acquisition and marketing assets. ETP’s general partner is owned by Energy Transfer Equity, L.P. (ETE). For more information, visit the Energy Transfer Partners, L.P. website at www.energytransfer.com.

Sunoco LP (SUN) is a master limited partnership that operates 1,355 convenience stores and retail fuel sites and distributes motor fuel to 7,825 convenience stores, independent dealers, commercial customers and distributors located in 30 states. Our parent -- Energy Transfer Equity, L.P. (ETE) -- owns SUN’s general partner and incentive distribution rights. For more information, visit the Sunoco LP website at www.sunocolp.com.

Forward-Looking Statements

This news release may include certain statements concerning expectations for the future that are forward-looking statements as defined by federal law. Such forward-looking statements are subject to a variety of known and unknown risks, uncertainties, and other factors that are difficult to predict and many of which are beyond management’s control. An extensive list of factors that can affect future results are discussed in the Partnership’s Annual Report on Form 10-K and other documents filed from time to time with the Securities and Exchange Commission. The Partnership undertakes no obligation to update or revise any forward-looking statement to reflect new information or events.

The information contained in this press release is available on our website at www.energytransfer.com.

ENERGY TRANSFER EQUITY, L.P. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions)
(unaudited)
June 30, 2017
December 31, 2016
ASSETS
Current assets
$
10,326
$
6,985
Property, plant and equipment, net
56,808
53,253
Advances to and investments in unconsolidated affiliates
3,182
3,040
Other non-current assets, net
852
816
Intangible assets, net
6,267
5,489
Goodwill
5,174
5,170
Non-current assets held for sale
--
4,258
Total assets
$
82,609
$ 79,011
LIABILITIES AND EQUITY
Current liabilities
$
7,765
$
7,277
Long-term debt, less current maturities
43,084
42,608
Long-term notes payable - related companies
--
250
Non-current derivative liabilities
201
76
Deferred income taxes
5,170
5,112
Other non-current liabilities
1,178
1,055
Liabilities associated with assets held for sale
--
68
Commitments and contingencies
Preferred units of subsidiary
--
33
Redeemable noncontrolling interests
22
15
Equity:
Total partners’ deficit
(1,185 )
(1,694 )
Noncontrolling interest
26,374
24,211
Total equity
25,189
22,517
Total liabilities and equity
$
82,609
$ 79,011
ENERGY TRANSFER EQUITY, L.P. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS
(In millions, except per unit data)
(unaudited)
Three Months Ended
Six Months Ended
June 30,
June 30,
2017
2016
2017
2016
REVENUES
$
8,935
$
7,415
$
18,163
$
13,522
COSTS AND EXPENSES:
Cost of products sold
6,887
5,479
14,178
9,816
Operating expenses
478
444
915
852
Depreciation, depletion and amortization
604
537
1,208
1,048
Selling, general and administrative
178
150
342
306
Total costs and expenses
8,147
6,610
16,643
12,022
OPERATING INCOME
788
805
1,520
1,500
OTHER INCOME (EXPENSE):
Interest expense, net
(485 )
(443 )
(966 )
(862 )
Equity in earnings of unconsolidated affiliates
49
95
136
156
Losses on extinguishments of debt
--
--
(25 )
--
Losses on interest rate derivatives
(25 )
(81 )
(20 )
(151 )
Other, net
67
26
92
43
INCOME BEFORE INCOME TAX EXPENSE (BENEFIT)
394
402
737
686
Income tax expense (benefit)
21
(7 )
60
(62 )
INCOME FROM CONTINUING OPERATIONS
373
409
677
748
Income (loss) from discontinued operations, net of income taxes
(256 )
15
(270 )
12
NET INCOME
117
424
407
760
Less: Net income (loss) attributable to noncontrolling interest
(95 )
183
(44 )
207
NET INCOME ATTRIBUTABLE TO PARTNERS
212
241
451
553
General Partner’s interest in net income
--
1
1
2
Convertible Unitholders’ interest in income
8
1
14
1
Limited Partners’ interest in net income
$
204
$
239
$
436
$
550
INCOME FROM CONTINUING OPERATIONS PER LIMITED PARTNER UNIT:
Basic
$
0.19
$
0.23
$
0.41
$
0.53
Diluted
$
0.19
$
0.23
$
0.40
$
0.52
NET INCOME PER LIMITED PARTNER UNIT:
Basic
$
0.18
$
0.23
$
0.40
$
0.53
Diluted
$
0.18
$
0.23
$
0.39
$
0.52
WEIGHTED AVERAGE NUMBER OF UNITS OUTSTANDING:
Basic
1,075.2
1,048.9
1,077.2
1,046.9
Diluted
1,141.3
1,063.8
1,143.7
1,052.5
ENERGY TRANSFER EQUITY, L.P.
SUPPLEMENTAL INFORMATION
(In millions)
(unaudited)
Three Months Ended
Six Months Ended
June 30,
June 30,
2017
2016
2017
2016
Cash distributions from ETP associated with: (1)
Limited partner interest
$
15
$
2
$
30
$
5
Class H Units
--
88
--
171
General partner interest
4
8
8
16
Incentive distribution rights
396
335
773
666
IDR relinquishments, net of distributions on Class I Units (2)
(162 )
(110 )
(319 )
(144 )
Total cash distributions from ETP
253
323
492
714
Cash distributions from Sunoco LP
31
22
54
44
Total cash distributions from investments in subsidiaries
$
284
$
345
$
546
$
758
Distributable cash flow attributable to Lake Charles LNG:
Revenues
$
50
$
49
$
99
98
Operating expenses
(4 )
(5 )
(9 )
(9 )
Selling, general and administrative expenses
(2 )
--
(2 )
(1 )
Distributable cash flow attributable to Lake Charles LNG
$
44
$
44
$
88
$
88
Expenses of the Parent Company on a cash basis:
Selling, general and administrative expenses, excluding certain
$
9
$
24
$
17
55
non-cash expenses
Management fee to ETP (3)
--
24
5
48
Interest expense, net of amortization of financing costs, interest
83
79
164
157
income, and realized gains and losses on interest rate swaps
Total Parent Company expenses
$
92
$
127
$
186
$
260
Cash distributions to be paid to the partners of ETE:
Distributions to be paid to limited partners (4)
$
250
$
240
$
500
$
480
Distributions to be paid to general partner
1
--
2
1
Total cash distributions to be paid to the partners of ETE
$
251
$
240
$
502
$
481
Common units outstanding -- end of period
1,079.1
1,044.8
1,079.1
1,044.8

_________________

(1)
Following the merger of Legacy ETP and Sunoco Logistics in April
2017, the Post-Merger ETP partnership agreement contains
distribution requirements consistent with those of Sunoco Logistics
prior to the merger.
(2)
IDR relinquishments for the three months ended June 30, 2017 include
the impact of incentive distribution reductions agreed to between
ETE and Legacy ETP in addition to incentive distribution reductions
previously agreed to between Legacy ETP and Sunoco Logistics.
(3)
ETE previously paid Legacy ETP certain fees for management services
under agreements expired in the first quarter of 2017.
(4)
Includes distributions of $0.11 per common unit for the three months
ended June 30, 2017, and $0.22 per common unit for the six months
ended June 30, 2017, to unitholders who elected to participate in a
plan to forgo a portion of their future potential cash distributions
on common units for a period of up to nine fiscal quarters,
commencing with the distributions for the quarter ended March 31,
2016, and reinvest those distributions in ETE Series A convertible
preferred units representing limited partner interest in the
Partnership.
SUPPLEMENTAL INFORMATION
RECONCILIATION OF DISTRIBUTABLE CASH FLOW
(Dollars in millions)
(unaudited)
Three Months Ended
Six Months Ended
June 30,
June 30,
2017
2016
2017
2016
Net income attributable to partners
$
212
$
241
$
451
$
553
Equity in earnings related to investments in ETP and Sunoco LP
(273 )
(334 )
(598 )
(732 )
Total cash distributions from investments in subsidiaries
284
345
546
758
Amortization included in interest expense (excluding ETP and Sunoco
3
3
5
6
LP)
Other non-cash (excluding ETP and Sunoco LP)
10
7
44
1
Distributable Cash Flow
236
262
448
586
Transaction-related expenses
4
14
7
40
Distributable Cash Flow, as adjusted
$
240
$
276
$
455
$
626
Distribution coverage ratio(1)
0.96x
1.15x
0.91x
1.30x
(1)
This press release and accompanying schedules include the
non-generally accepted accounting principle ("non-GAAP") financial
measures of Distributable Cash Flow and Distributable Cash Flow, as
adjusted. The Partnership’s non-GAAP financial measures should not
be considered as alternatives to GAAP financial measures such as net
income, cash flow from operating activities or any other GAAP
measure of liquidity or financial performance.
Distributable Cash Flow and Distributable
Cash Flow, as adjusted. The Partnership defines
Distributable Cash Flow and Distributable Cash Flow, as adjusted,
for a period as cash distributions expected to be received in
respect of such period in connection with the Partnership’s
investments in limited and general partner interests, net of the
Partnership’s cash expenditures for general and administrative
costs and interest expense. The Partnership’s definitions of
Distributable Cash Flow and Distributable Cash Flow, as adjusted,
also include distributable cash flow from Lake Charles LNG to the
Partnership. For Distributable Cash Flow, as adjusted, certain
transaction-related expenses that are included in net income are
excluded.
Distributable Cash Flow is a significant liquidity measure used by
the Partnership’s senior management to compare net cash flows
generated by the Partnership to the distributions the Partnership
expects to pay its unitholders. Due to cash expenses incurred from
time to time in connection with the Partnership’s merger and
acquisition activities and other transactions, Distributable Cash
Flow, as adjusted, is also a significant liquidity measure used by
the Partnership’s senior management to compare net cash flows
generated by the Partnership to the distributions the Partnership
expects to pay its unitholders. Using these measures, the
Partnership’s management can compute the coverage ratio of
estimated cash flows for a period to planned cash distributions
for such period.
Distributable Cash Flow and Distributable Cash Flow, as adjusted,
are also important non-GAAP financial measures for our limited
partners since these indicate to investors whether the
Partnership’s investments are generating cash flows at a level
that can sustain or support an increase in quarterly cash
distribution levels. Financial measures such as Distributable Cash
Flow and Distributable Cash Flow, as adjusted, are quantitative
standards used by the investment community with respect to
publicly traded partnerships because the value of a partnership
unit is in part measured by its yield (which in turn is based on
the amount of cash distributions a partnership can pay to a
unitholder). The GAAP measure most directly comparable to
Distributable Cash Flow and Distributable Cash Flow, as adjusted,
is net income attributable to partners.
Distribution Coverage Ratio. The
Partnership defines Distribution Coverage Ratio for a period as
Distributable Cash Flow, as adjusted, divided by total cash
distributions expected to be paid to the partners of ETE in
respect of such period.
SUPPLEMENTAL INFORMATION
FINANCIAL STATEMENTS FOR PARENT COMPANY
Following are condensed balance sheets and statements of operations
of the Parent Company on a stand-alone basis.
BALANCE SHEETS
(In millions)
(unaudited)
June 30, 2017
December 31, 2016
ASSETS
Current assets
$
68
$
57
Property, plant and equipment, net
28
36
Advances to and investments in unconsolidated affiliates
5,980
5,088
Intangible assets, net
--
1
Goodwill
9
9
Other non-current assets, net
18
10
Total assets
$
6,103
$
5,201
LIABILITIES AND PARTNERS’ CAPITAL
Current liabilities
$
63
$
92
Long-term debt, less current maturities
6,693
6,358
Long-term notes payable - related companies
530
443
Other non-current liabilities
2
2
Commitments and contingencies
Total partners’ deficit
(1,185 )
(1,694 )
Total liabilities and partners’ deficit
$
6,103
$
5,201
STATEMENTS OF OPERATIONS
(In millions)
(unaudited)
Three Months Ended
Six Months Ended
June 30,
June 30,
2017
2016
2017
2016
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
$
(9 )
$
(44 )
$
(22 )
$
(81 )
OTHER INCOME (EXPENSE):
Interest expense, net of interest capitalized
(86 )
(82 )
(169 )
(163 )
Equity in earnings of unconsolidated affiliates
308
369
669
799
Losses on extinguishments of debt
--
--
(25 )
--
Other, net
(1 )
(2 )
(2 )
(2 )
NET INCOME
212
241
451
553
General Partner’s interest in net income
--
1
1
2
Convertible Unitholders’ interest in income
8
1
14
1
Limited Partners’ interest in net income
$
204
$
239
$
436
$
550

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SOURCE: Energy Transfer Equity, L.P.

Energy Transfer
Investor Relations:
Lyndsay Hannah, Brent Ratliff, Helen Ryoo, 214-981-0795
or
Media Relations:
Vicki Granado, 214-840-5820